SINGAPORE, Nov 24 — Oil eased today to hover above US$77 (RM262) a barrel, held down by a firmer greenback, but trade thinned ahead of the Thanksgiving holiday and weekly US data that could show crude stocks rising in the world’s top oil user.
The dollar trimmed losses as Tokyo stocks failed to follow up a stronger day on Wall Street, prompting some investors to buy back the dollar, and as others closed dollar-short positions before the Thanksgiving holiday.
A weekly report, due later from the American Petroleum Institute (API), which is likely to paint a more bearish picture of US energy demand, could offer more trading cues in a holiday-thinned week.
With a slew of economic data due this week, including November consumer confidence and revised US third-quarter gross domestic product figures today, as well as the minutes of the Fed’s last policy meeting, traders will be scouring the numbers for signs of improvement in the world’s largest economy.
“Crude has come off a fraction this morning due to a stronger dollar, but it’s nothing dramatic, and not a lot is going to happen ahead of the Thanksgiving holiday,” said Peter McGuire, Managing Director of Commodity Warrants Australia.
“The market is basically in a holding pattern, awaiting more data.”
US crude for January delivery eased 30 cents to US$77.26 a barrel by 0700GMT (3pm Malaysian time), after settling up 9 cents at US$77.56 yesterday. London Brent crude fell 14 cents to US$77.32.
While oil is up about 74 per cent this year, it is still down 47 per cent from its July 2008 high over US$147 a barrel.
A Reuters survey of analysts forecast US inventory data to show a 1.6 million barrel build in crude stocks for the week to Nov 20, as production rebounded from Gulf of Mexico disruptions caused by Tropical Storm Ida.
Product stocks were also seen higher ahead of the release of the weekly report by the American Petroleum Institute at 2130 GMT.
Oil markets have looked toward broad economic data this year for signs of a global recovery that could boost flagging fuel demand.
At 1330 GMT, the US Commerce Dept will unveil its revised estimate of third-quarter GDP growth. Economists forecast a 2.9 per cent annualised pace of growth, compared with a 3.5 per cent rate in the first Q3 estimate.
A US consumer confidence reading for November will also be released by the Conference Board at 1500 GMT. Economists expect a reading of 47.7, steady versus October’s level.
US stocks snapped a three-day losing streak yesterday as stronger-than-expected home sales data fuelled optimism while a weaker dollar boosted commodity-linked stocks.
Investors have been buying into commodities in a bid to hedge against the dollar’s weakness and to guard against concerns an ultra-easy monetary policy could lead to a jump in inflation as the world economy rebounds.
Prices were also supported by forecasts of a colder-than-expected US winter early next year and tension surrounding Iran’s air defence war games on Sunday.
Private weather forecaster WSI Corp said yesterday the US Northeast, the world’s top consumer of heating oil, would have a warmer December than normal, followed by colder than usual temperatures in January and February.
Iran’s war games came a day after senior officials from six world powers said they were disappointed the country had not accepted proposals meant to delay its potential to make nuclear weapons, with US President Barack Obama warning there could be a package of sanctions within weeks. — Reuters
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